Business
Barbados: Tax changes announced in 2012-13 budget
In addition, a new levy to fund environmental inititiatives is proposed to be introduced on personal income, at rates of:
0.1 percent on income between BB$ 25,000 (US$ 12,500) and BB$ 50,000 (US$ 25,000);
0.15 percent on income between BB$ 50,000 (US$25,000) and BB$ 100,000 (US$50,000); and,
0.25 percent on income above BB$ 100,000 (US$ 50,000).
Major changes are also proposed to corporate income tax. The proposals are in response to a Canadian tax law change, which came into effect in January 2010, and extended benefits to Tax Information Exchange Agreement signatory nations that were previously only provided for nations with a Double Tax Agreement with Canada, such as Barbados.
Prior to the change, Barbados had since 1995 been the lowest tax jurisdiction for companies seeking to generate exempt surplus, ie. taxed income in Barbados that could be repatriated to Canadian parent companies without further tax being incurred by the parent companies. However, as a result of the law change, tax-neutral territories such as Bermuda, the Bahamas, and the Cayman Islands are now able to offer the same benefits.
In an effort to maintain the attractiveness of Barbados’s international financial center for Canadian businesses, the government has proposed to reduce the corporate tax rate applicable to companies taxable under the International Business Companies Act and the Restricted Liabilities Act.
